Getting Reimbursed for Flights: What Do the FARs Say? · Getting Reimbursed for Flights: What Do...

Getting Reimbursed forFlights: What Do the FARs

Say?

Tuesday, October 11, 2011

10:30am – 11:30am

Eli Mansour, Luce Forward

Kathleen Yodice, Yodice Associates

Agenda

•Regulatory Background

•Private Pilot Privileges

•Commercial Pilot Privileges

•Q&A

Compensation

• Does not require a profit, a profit motive or the actual payment offunds

• The receipt of anything of value

– Flight Time

– Goodwill

– Exchange of Services

Air Carriers, Commercial Operators

• Air Carrier is “a person who undertakes directly by lease, or otherarrangement, to engage in air transportation”

• Commercial Operator is “a person who, for compensation or hire,engages in the carriage by aircraft in air commerce of persons orproperty”

Common Carriage

• An operation for compensation or hire in which an operator holdsitself out (by advertising or any other means), as willing to furnishtransportation for any member of the public

• 4 elements in defining a common carrier:

– (1) a holding out of a willingness to (2) transport persons or property(3) from place to place (4) for compensation

Private Carriage

• Carriage for compensation or hire which does not involve holdingout

– No advertising or other means of holding out

– Includes operations where reimbursement (compensation) ispermitted to pilots

Experimental Aircraft

• May NOT be used to carry persons or property for compensationor hire

• Limited exceptions

– Towing a glider that is a light-sport aircraft or unpowered ultralightvehicle by a qualified pilot and by an aircraft that has had a current100 hour inspection

– Conducting flight training pursuant to FAA deviation authority

Private pilot privileges and limitations

• FAR Section 61.113

– No person who holds a private pilot certificate may act as pilot incommand of an aircraft that is carrying passengers or property forcompensation or hire

– Nor may that person, for compensation or hire, act as pilot incommand of an aircraft

Reimbursement by Employer

• FAR Section 61.113(b)

– Flight is only incidental to the private pilot’s business or employment

• Business or employment cannot be related to the flightoperation (e.g. pipe patrol, aerial photography)

– No passengers or property are carried on the aircraft forcompensation or hire

– Unclear whether the language used by FAA intended to limit thescope of the “compensation” to reimbursement of the expense of aflight

Sharing of Flight Expenses

• FAR Section 61.113(c)

– Private pilot can share operating expenses with passengersprovided private pilot does not pay less than the pro rata share ofthe operating expenses

– Limited to fuel, oil, airport expenditures, and rental fees

– Purpose of flight must be bona fide - joint venture for a commonpurpose

• Attending same meeting

• Goodwill (dropping off clients) is not bona fide purpose (likely iscompensation)

Charitable Flights

• FAR Section 61.113(d)

– Private pilot can be reimbursed for operating expenses of charitable,nonprofit, or community event flight provided private pilot does notpay less than the pro rata share of the cost of owning, operating,and maintaining the aircraft for that flight (fuel, oil, airportexpenditures, and rental fees)

– Reimbursement limited to passenger portion of above costs

– Sponsor and pilot must comply with FAR requirements applicable tosuch charitable, nonprofit, or community event flight

Charitable Flights – Sponsor Organization

– Organization must be either

• IRS-recognized charitable organization

• Local or community cause

• Non-profit organization recognized under State or Federal law,as long as one of the organization's purposes is the promotionof aviation safety

– Organization is prohibited from being in the business oftransportation by air

Charitable Flights – Flight Restrictions

• FAR Section 91.146(b)

– Nonstop VFR day

– NOT point to point (same airport)

– Within a 25 mile radius of the public airport where the flightoriginated and must end

– Standard airworthiness certificate (30 passenger seats or less and apayload of no more than 7,500 pounds)

– No aerobatic or formation flights

– Not over national park or tribal lands, without prior FAA approval

– Only 4 charitable events or non-profit events per year

– Only 1 community event per year

– No event more than three consecutive day

Charitable Flights – Flight Restrictions

– Private pilot acting as PIC must have at least 500 hours of flight time

– Conduct the flight according to safety provisions in FAR Part 136(commercial air sightseeing tours)

– Limited to 4 events per calendar year

Charitable Flights – Notification

• FAR Section 91.146(e)

– Notify local FSDO at least 7 days in advance

– Signed letter that includes the date, time, location and purpose ofthe event, and a list of any prior events in the year conducted by thesponsor

– Photocopy of each pilot in command's pilot certificate, medicalcertificate, and required logbook entries

– Statement acknowledging compliance

Search and Location Operations


– Private pilot may be reimbursed for aircraft operating expenses thatare directly related to sanctioned search and location operations

– Flight under the direct control of a local, state of federal agency or arecognized search and location operation

Commercial pilot privileges and limitations


– Commercial pilot may

• Act as pilot in command of an aircraft that is carrying persons orproperty for compensation or hire

• Act as pilot in command of an aircraft for compensation or hire

– As long as pilot meets all requirements and has all qualifications forexercising commercial license

– As long as operation complies with all applicable FARs

Certification Requirements

• Certification required for:

– Air Carriers

– Commercial Operators

– Private carriage involving aircraft with 20 or more seats, or 6,000pounds or more maximum payload capacity

General Rule

• Unless pilot meets all requirements for exercising commerciallicense USE THE RULES APPLICABLE TO PRIVATE PILOTS

– e.g. commercial pilot with 3rd class medical

• Unless operation is exempted from air carrier certificationrequirement USE THE RULES APPLICABLE TO PRIVATEPILOTS

– If operation is scheduled air transport must be certified air carrieroperating under Part 121

– If operation is on demand air carriage must be certified air carrieroperating under Part 135

• Limited certification requirement exceptions specified operationsexemption

Certification Requirement Exceptions


• NOT POINT TO POINT

– Student instruction

– Ferry or training flights

– Aerial work operations, such as crop dusting, seeding, spraying, andbird chasing

– Banner towing

– Aerial photography or survey

– Fire fighting

– Helicopter operations in construction or repair work

– Powerline or pipeline patrol

– Sightseeing flights conducted in hot air balloons


• FAR Section 119.1(e) (cont.)

• Nonstop Commercial Air Tours

– Standard airworthiness certificate

– Passenger-seat configuration of 30 seats or fewer and a maximumpayload capacity of 7,500 pounds or less

– NOT POINT TO POINT

– Conducted within a 25-statute mile radius of that airport



• Helicopter Flights conducted within a 25 statute mile radius of theairport of takeoff

– Not more than two passengers

– Day VFR conditions

– Standard airworthiness certificate

– 100-hour inspection requirement

– FSDO notified at least 72 hours before each flight

– No more than 6 flights in any calendar year

– Each flight has been approved by the FAA

– No cargo



– Operations conducted under part FAR Part 133 (rotorcraftcertification demonstration flights)

– Operations conducted under part FAR Part 375 (operation of foreigncivil aircraft in the United States)

• Emergency mail service conducted under 49 U.S.C. 41905


• FAR Section 91.321 (carriage of candidates in elections)

– Carrying a candidate, agent of a candidate, or person traveling onbehalf of a candidate, running for Federal, State, or local election

– No aircraft operators whose primary business is as an air carrier orcommercial operator


• Except for carriage of candidates in elections, no specificlimitation on compensation paid to commercial pilots for theoperations exempt from commercial operator certification

• For carriage of candidates in elections payment to commercialpilot is limited only to that amount required by the FederalElection Commission or the applicable state or local law

Specified Operations Exemption


– Reimbursement to commercial pilot for

• Demonstration flights to prospective customers

• Carriage of property (other than mail) on an airplane operatedby a person in the furtherance of a business or employment(other than transportation by air) when the carriage is within thescope of, and incidental to, that business or employment


• FAR Section 91.501 (cont.)

• Carriage of company officials, employees, and guests of thecompany under a time sharing agreement

– Limited to a company

– Cannot be operated by individual

– Requires written time sharing agreement


• FAR Section 91.501 limited to large and turbine poweredmultiengine aircraft

• NBAA Exemption 7897 available for small aircraft

– Aircraft operator must be a NBAA member

– Inspection program under FAR Section 91.409(f)

– Notify and provide certain materials to FAA


• FAR Section 91.501 (cont.)

– Commercial pilot (or company, in the case of flight conducted under timesharing agreement) can be reimbursed:

• Twice the actual expense of fuel, oil, lubricants, and other additivesincurred for the operation

• Travel expenses of the pilot, including food, lodging, and groundtransportation

• Hangar and tie-down costs away from the aircraft's base of operation

• Insurance obtained for the specific flight, if any

• Landing fees, airport taxes, and similar assessments

• Customs, foreign permit, and similar fees directly related to the flight

• In flight food and beverages

• Passenger ground transportation

• Flight planning and weather contract services

FAA Flight Department Company problem

• Carriage by air must be merely incidental to the aircraftoperator's other business. 14 CFR 1.1

– Operator should have other material business operations

– Carriage should not be a major enterprise for profit

• “if a corporation is established solely for the purpose of providingtransportation to the parent corporation, a subsidiary, or othercorporation … the primary business of the corporation operatingthe airplane is transportation and the carriage of persons orgoods for any other corporation, for a fee or charge of any kindwould require the corporation operating the airplane to hold acommercial operator certificate …” 37 Fed. Reg. 14758

Q&A

• Eli Mansour, Luce Forward

• [email protected]

• (858) 720-6336

• Kathleen Yodice, Yodice Associates

• [email protected]

• (202) 737-3030 & (301) 695-2300

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